Commercial Real Estate: The Next Hole in the Economy

[digitalraver81]

this is the type of fucker who ruined the economy. they borrow crap lots of money from the bank b/c they expect to make a lot of money. but bam.....bad move......and now the bank wants a bailout from the taxpayer. FU!!!

[ViperSRTnACR]

Sad, but at the rate things are going in both residential and commercial markets along with out of control government spending and back hand deals taking place to try and recoup what was lost, I cant see this getting suddenly "better" anytime soon.

[MrJeffreyNeal]

@ViperSRTnACR You;re correct

JTN

[denniskoutou]

the video is great!!!

[MrJeffreyNeal]

@denniskoutou Thank you.  See more at athirdvoice.wordpress com

[VegasRealEstateBlog]

love your channel and vids!!!!!

When you get a chance, explore my channel for real estate news, tips and more

[spectrum2000now]

This video shows the one part of affected area in the real estate industry because of the financial crisis experience by U.S

[spectrum0590]

Hopefully, at this point of time. People will be able to learn about the economic crisis happens in the past years.

[carmichael121]

Well, he's screwed, but that building will be fine. Did people stop moving to DC? Did government or lobbying suddenly get smaller?  No. Someone will pick it up at a distressed price and it'll have 80% occupancy in five years.

[TheREIMaverick]

Just wanted to comment on your video, I REALLY liked it and I wish you great success with this video!

[MrJeffreyNeal]

Respond to this video...

 Thank you. visit my blog too please

[TigerStripesLLC]

If they would have used our Commercial Real Estate app they would have known what they could have afforded!

[ginatwo1]

This video makes it sound like the banks are the victims. The other side of the story is that the banks themselves made these loans on good projects, not caring whether they had the capital to fund them, then failed to fund the construction loans adequately. The banks did not honor their loan contracts, stopping the projects in midstream, then foreclosed on the properties under "at will" clauses, knowing that the government would bail out the bank, and lining the pockets of the bank insiders.

[mkmason2002]

Walking down the street with your kids looking at a stadium? In your dreams pal.

Propaganda from none other than the Huffington zoo.

[MentalReserve]

Thats where this guy fucked up ...a baseball stadium? WTF? baseball is dead moron

[LookUpAtSkyNow]

funny this was done by a piece of crap rag like the Huff Post...

Drive around your hood see how many un occupied business buildings there are.

Call a couple of local commerical RE places and ask how many 100,000's of sq ft are unoccupied and ask: HOW LONG THEY HAVE BEEN EMPTY! This will clear the lie being spewed that the economy is improving. SIMPLE MATH

NO BUSINESS = NO JOBS = NO IMPROVEMENT. Dont leat the scum media spin the lie " it's getting better".

[Puzzoozoo]

Scary, and this commercial bubble will ripple around the world, when a large market like America is affected. As a tiny example of what it looks like, I was in Dubai when their commercial bubble went pop. Believe me, it isn't pretty when it goes.

[GrandPatzer]

So there was a residential real estate bubble burst, and now there will be a commercial real estate burst coming right behind it?

[Puzzoozoo]

@GrandPatzer Yes, you got it, the only difference is the size of the loans involved, think of last years residential bubble pop x10 as a very conservative estimate.

[AthensUGAdawg]

kudos to Mr. Neal for accepting blame for the failure of his project...and for those of you that think he should have built "low income housing", what in the hell have you done lately?

[KMGiSolutions]

"unavoidable bloodbath" - that really drives home the extent of the crisis.

[mcapps1]

You took a gamble and you lost. Gambling isn't investing. If you want to get down to the root, you created bad karma because you're developing properties for your own selfish reasons. You spoke of replacing "crack houses"?, How about developing modern AFFORDABLE housing instead? Why can't you be happy with compensation for your time in planning projects instead of trying to make a killing? Your way of thinking is KILLING US, but you're not missing the payment on the Benz yet are you?

[LCT29]

@mcapps1

fuck off-move to Euroweenie land-your way of thinking is killing this country-believe me if you had the Benz instead of the '92 Buick, you'd want those payments made

[beepeelow]

Wonderful piece. A very sober analysis by this developer in a market that was less risky than most.

[tsn98]

Silly goose his ego was too high to see the danger coming from over lending in the oversized, overbuilt, super size 'big mac' society. Something had to give sooner or later. And he thinks he'll still bring down his children and they'll be walking down the street and say 'I thought of that'. What a moron.

[countryfunkinbunkin]

globalization who needs the American middleclass. Sure we built the country now were like the plus fifty executives dump us before retirement buy cheaper labor save a bundle. They seem to know or assume were spineless and take everything sitting down. Please don't let them be right..

[TheLiberalssuckdick]

I was going to buy a house in early December but then i was advised not to because apparently we might take another dip in February.

But who knows.

WE NEED TO GET THE FUCKING GOVERNMENT OUT OF THE DAMN MARKET. THEY ARE DISTORTING THE PRICES.

[MrAlanKendall]

In 2010 and 2011 1.6 trillion dollars of residential loans will adjust higher (Alt-A and Option-Adjustable-Rate loan programs). This will cause a softening of the market and the last 3 months of 2011 and the first 3 months of 2012 will be the softest time in Real Estate. Buy then.

[Chessnha]

over 10% vacancy doesn't come overnight. Think about that.

[procommenter]

Fascism will save us, somehow.

[62636263c]

@procommenter No "ISM" is likely to save us.

[procommenter]

Fascism is what's being promoted by the powers-that-be as the cure-all for America's ills.

[bobjman]

Well, the Sherman Anti-Trust Act does. But it doesn't help that no one on the left or right seems to care about the Anti-Trust Act anymore. It doesn't help that special interest lobbies like the American Medical Association, and special groups, like the insurance co. has specifically been exempted from that act.

Enforcing it is pretty simple; it's just that no one does.

[davidameyers]

Well said. A complete goat-fuck by design. Then when everyone is penniless, they'll institute government everything to solve the problem. Problem=>Reaction=>Solution. Hear the sheeple bleat for help.... Heeeeeeelp meeeeeee!

[hobo59]

Saw this coming a mile away.

On a side note, it didn't help that these buildings displaced thousands of poor and low income people.

[brotherjupiter]

These are the types of characters who have captured the

American government and gamed the US financial regulatory system for pure personal greed .

[hurchel]

I hate the developers, and eminent domain, and in california we got the builders line up to build green, and SB 375, on the horizon, california has never had a problem with natural development, but now we are overdeveloped and the SCAG and RHNA figures are still coming, fricking insane councils of governments under orders from the UN agenda 21 building clusterfucks

[audiohi]

So you're telling me that you buy things you dont want to buy because the TV tells you to? You do that personally?

Hilarious. That pretty much explains your position on capitalism right there. You'll believe and do anything exterior sources tell you to.

[Mixman77]

We know the democrats started the KKK and they caused the civil war by not wanting to end slavery. After the civil war the republicans placed 13 blacks into our government stating they had been done wrong and this would insure it wouldn't happen again. The democrats protested them out and have protested black people in our government until the 60's when they needed them. Please do not allow them to use you, Americans are too smart for this to happen to our great land. Bring America back in 2010!

[Mixman77]

And who was it that created these radical lending practices? THE DEMOCRAT - PERIOD! When Clinton was in office he is the one who brought in Rendition and he set up to lend to people who could not afford it. Then the DEMOCRATS purposed the tarp and rushed it through being they have had control of congress since 2006...to blame bush is simply ignorant and untrue and enough is enough...we need to make those responsible pay...THE DEMOCRATS...Tim G was chair on the first tarp bailout. We got set up!

[Mixman77]

Lets be honest, if people like Neal were honest when they held the keys to the economy we all would not be in the place. These same business men on here crying about their loses are typically the ones who caused the problems to begin with through poor business practices. The only people who are truly suffering are the hard working Americans who are now of work because of these business moves. We need honest people in America and boot the rest! The DEMOCRATS have really screwed us!

[hurchel]

Mixman77 please this is not a republican thing or a democrat thing, this is a greedy, the only jobs left in america, are the building, and all the buildings are empty, because people are addicted to credit, look at the derivatives, how does it feel to be a red chinese democrat or red chinese republican? Shit we are being so dumbed down by chemtrails nobody has the energy to think let alone build..

[audiohi]

Between now and 2 years from now we're going to look back at this video as a cassandra. This is 100% true ladies and gentlemen, what happened in the housing market is exactly whats going to happen with commercial real estate. All this is going to happen IN the second dip of a double dip recession, which will in fact be more of an inflationary depression. Of course if the FED leaves interest rates unchanged for the next two years we'll just see hyperinflation. Damned if u do, damned if u dont.

[audiohi]

Thats not true by any means. Businesses wont make money if people dont buy their product. They're giving people what they want, if people dont want it, they wont invest in what the business is selling and the company will fail. Its simple logic, its amazing you dont understand it. Businesses cant be greedy if there arent people giving them money by their own free will.

[audiohi]

Tha bailouts shouldnt have happened at all. The bailouts are going to seriously fuck up the economy you cant just print money without consequences otherwise we would have printed 50 Trillion to 'realllly' get our economy back on its feet ;)

I mean wth lol

[bobjman]

I'm sorry but you have no factual basis for these claims and seem to exhibit an all too common misunderstanding of how capitalism works. Capitalism discourages against wealth concentration in markets if those markets are functionally free. Excessive bigness creates inefficiencies more often than economies of scale and naturally fails. This would mean bankruptcy in a capitalist system, but in the US Monetarist System it means the Fed bails you out.

We're all Friedmanites now.

- L. Summers

[david11111111]

I have a marginally greater respect for business persons (some would call them speculators) such as Neal, who at least are dealing in tangible entities and tangible assets.

It is the Wall Street institutions who deal in exotic "financial instruments", multiple steps "derived" (removed) from reality, that I have little time for.

[tooltalk]

deficit spending is good for economy - hey, just look at the WW2, America had 200% debt to GDP ratio and that lifted the economy from the Great Depression! Americans are not borrowing enough, we need to encourage them to borrow more and spend more. All you need to do is create even easier credit and start endless wars / welfare state to spur the federal gov't "spending". "Saving" is bad; debt driven "spending" good. Don't you even read Krugman's blogs on NYTimes?

[tooltalk]

imnotlistenin: by 2007, average Americans owed $36K in credit-card debt alone, plus various long-term loan obligations. The gov't has been encouraging this irresponsible deficit spending for individuals claiming that "spending" is good for economy. Why? That's what they've been doing for the last 50 years - that's how they financed all their wars and welfare programs. No surprise here that the gov't itself is the largest "debtor" in the world! This is based on Keynesian idea, that mindless

[tooltalk]

imnotlistenin: banks' taking enormous risk didn't start with the repeal. In fact, the crash of 2001 (aka, the burst of the tech bubble and 9/11) should have prevented these firms from getting too big and the economy should have contracted significantly. Instead, thx to gov't's intervention (low-interest rate by the Fed), the correction immediately turned into another bubbles with record automobile sales in 2002 & 2003 (at this point more cars than drivers) and later in the housing market.

[monicapttrsn]

Listen folks, these kinds of folks put together these massive projects, and then charge skyrocket rents. Now, shelter is a necessity. I would love to see free-of-charge shelter in America just to get back at all those who caused so much financial stress on the average American. They didn't care how bad we hurt to pay rent and mortgage; they never gave a damn. If they could have skyrocketed drinking water fees (a basic necessity) they would have done so.

[tooltalk]

imnotlistenin: has more to do with the gov't intervention in economics - be it monetary interest setting by the Fed - and the welfare state created by liberal gov't, etc for the past 40-50 years. The US economic system is failing b/c it's been moving towards a state-controlled command economy and their ambition for "control".

[tooltalk]

imnotlistenin: oh boy, another clueless liberal.

Actually no. capitalism actually works quite well - just ask Chinese and Indians who have progressively towards freer-market since 80's.

The problem isn't so much that capitalism is inherently bad, but that in many societies, there are many delusional liberals like yourself, who believe that their infinitely wise and benevolent gov't (ie, lawyers & politicians) can a fair playing field and regulations for all. Likewise, the problem today

[dakusahab]

capitalism is A-moral in that it is a "MINDLESS" system based on infinite growth, people in the last 200 years, since the discovery of mass coal, oil and natural gas became disillusioned into thinking growth is the norm, when its not, I laughed when this guy said he said its no big deal deal we will grow again, WRONG, you will not grow again, this is it, its the end of the road for industrial civilization, we will not grow we will fall and I hope capitalism and GOD die with it.

[TheNewVideo]

You radical leftists are so full of shit that it comes out on YouTube. You are an idiot if you think you can change people to believe your crock of shit. How in the hell can you suggest that survival is no longer needed? How in the hell can you also suggest that people don't want to have faith in anything? Success and opportunity is what people need and want. Not the destruction of it. What a moron.

[jwinter228]

We really have corporatism. We have centrally-planned interest rates and resource allocations that combine special interests/massive corporate influence with malinvestment and gross imbalances. This aggregates power in a few hands and keeps out competition. This, on top of social security/medicare future liabilities (60 trillion), war spending, and huge trade inbalances, is heading us (via the dollar) towards a cliff. I'm convinced it's policy- not a true free market that is inherently flawed.

[jwinter228]

Exactly - I hate to even segregate the parties - they have their differences but they both sure know how to screw everything up. They need to get out of the way and let the market work - instead we're told it's 'evil capitalism' and greed. It's 'heads we win, tails the taxpayer loses.'

[CSteven59]

The Democrats are the ones to blame. Being in charge of the financial regulation in our country: Who was the greedy party? No pun intended - The Demos. Obama doesn't have a clue what is going on, but to take us and the U.S. down to depths of Socialism. Protect the Unions? Who do you think is the new class of society? The Rich class, Union dues payers class, Non-Union class, homeless. Every Democrat that was alive fifty years ago is spinning in their graves right now. What a mess!!!

[1911arthur]

Greed has caused all these collapses. Everyone has become greedy.Health Care CEO's,Bankers, Realators, Doctors, Everyone.

Who pays? US.

The rich get richer and the poor get poorer.

They have destroyed the middle class with greed.

thank god Obama is stopping some of it.

He needs to tax the crap out of them and regulate the hell out of them and start protecting the middle class and unions like he said he would.

Teachers need to make $50,000 a year to start,not poverty wages.

[tooltalk]

1911arthur: you are a partisan idiot. There is no difference between Obama and Bush (though they both are liberals - neoconservatism is a type of liberalism; a militant internationalist and welfare statist to be preceise). Obama for the most part continued everything that Bush started in the past 9 years.

[DillonX]

Near my house we are actually having a building boom now.

Where all the money for these buildings is coming from - I don't know.

[EndTheFedRes]

What "neck of the woods" do you live in Dillon? We had a bit of a boom as well, here in Northern Colorado. I'm sure its a little different than Detroit. lol

[grayshorts]

It is bad by my house.

There are big stip malls that have been there for a year and a half or more and they might have one lease in them and these are real busy areas.

My dad called this 2 years ago because he lived through this stuff in the early 80's. Back then they would just bull doze commercial properties because they were worthless.

[AfricansAgainstObama]

So let them fail.

[ric0rich]

Once the market finds a real bottom those building will fill up. The longer the government props up the fraudulent housing and commercial real estate markets, the longer those buildings stay empty.

[crock703]

This whole part of SW D.C. is a brand new ghost town. He's right, they did bite off more than they could chew.

That said, why don't they try dropping their absurd apartment rents and temporarily rent//lease their condo space. They're doing the equivalent of trying to sell a home for 2006 prices, it's an inflated unrealistic number, and now everyone knows it. That's why your luxury residential space is empty.